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Housing Memo October 28, 2010 Page 3 CEE Pros Cons -Access to MHFA programs -Access to a variety of energy-saving specific programs -Low administration cost -Remodeling advisor -No access to Ramsey County Community Development Block Grant (CDBG) fund. Both agencies have the capacity and resources to administer the program. GMHC has access to CDBG funds from Ramsey County, but their administrative costs are higher. CEE costs are lower and are based on services provided; in addition the agency has a strong background in energy efficiency. Program Design There are likely an infinite number of program design options. It should be important to note, that both agencies have access to loan funds from the Minnesota Housing Finance Agency (MHFA). MHFA is the primary lender for home improvement financing in the state. The City may want to carefully consider whether to fund its own program or choose to augment an MHFA program (i.e. interest rate write down). In this way, the City could leverage a significant amount of outside funds. Below are some options with regard to program design: 1. Council suggested a program that included a $20,000 limit per loan, 3% interest rate, and 20 year term to exclusively target exterior home repairs. Included in the July work session materials was a staff suggestion that funds be directed towards housing built before 1970 and assessed at a value no greater than $200,000. This recommendation was based on the exterior Housing Conditions Survey, which illustrated older homes with lower values had more exterior problems. By targeting these homes, the City may experience "more bang for the buck" but it's also possible these homeowners still cannot afford to do the necessary improvements. 3. Staff is aware of a need for emergency loans for residents for items such as sewer repairs. Residents who need emergency loans are often are put on a waiting list until funds are available from Ramsey County.